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Multi-channel Sound System Enhancement for Game Consoles Scheduled For Fall 2000 Availability

``We're very pleased with this new CS-I technology,'' stated Thomas Yuen, CEO of SRS Labs, Inc. ``We've been aggressively pursuing a new directive focused on taking our existing technologies and adapting them for major growth markets. The development of CS-I and the availability of a surround sound API for various game platforms is an example of how our current offerings can be tailored for specific markets. Game enthusiasts world-wide will appreciate the immersive and rich sound these new technologies deliver ... as will developers who will have unprecedented control over real-time sound movement. We're anxious to demonstrate these breakthroughs and to continue to bring superior audio technologies to the many applications in need.''

CS-I was developed by SRS Labs and is based on SRS Labs' patented multi-channel Circle Surround 5.1 technology. Based on a combination of software and hardware developments consisting of real-time 5.1 channel encoding technology that can be incorporated into console game software, and a small, simple and inexpensive hardware decoder, CS-I creates a new dimension in sound for console gaming.

The first available hardware product will consist of a custom CS-I decoder and two-rear surround speakers, which in conjunction with the stereo speakers of a TV or a separate stereo system can play back the CS-I encoded game audio signals in five channels. The center speaker is simulated as a phantom source using the front left and right speakers. Designed by SRS, the hardware decoder will be manufactured by its wholly owned subsidiary ValenceTech Limited and marketed by SRS Labs via third party game product channels.

Game developers will be able to take advantage of these sound advancements for real-time position encoding through easily integrated ``middleware'' which will be available from various SRS Labs partners. By utilizing the encoding API, developers can achieve real-time movement of sound locations; front, back, left and right, in accordance with the movement of game objects relative to the user.

CS-I can also be used to playback encoded sound source from DVD, video, and satellite broadcasts. When connected to the stereo output of a media player, it provides a dramatic five-channel surround sound field comparable or superior to other 5.1 channel transmission and decoding methods. For conventional non-encoded stereo sources, a special mode of CS-I can create a five-channel sound field allowing the user to enjoy any existing library of non-encoded source material.

About SRS Labs, Inc.

SRS Labs is the world's leading provider of audio and voice enhancement technology solutions. SRS Labs' business consists of licensing audio and voice enhancement technologies to manufacturers of consumer electronics, computer, gaming and telecommunications equipment; the design of custom ASICs (application specific integrated circuits) for consumer electronics, game, telecommunications and personal computer manufacturers; the distribution of components, chips and assembly systems for the China and Hong Kong markets; and the manufacturing and marketing of home theater and game products for the Asian consumer marketplace.

For more information on SRS Labs' technologies, the company's worldwide licensing program or its design and manufacturing capabilities, visit the SRS Labs website at http://www.srslabs.com.

Except for historical information contained herein, Company statements and each of the statements of Mr. Yuen in paragraph two of this release includes forward-looking statements and projections (including statements concerning plans and objectives of management for future operations) that are based on management's belief, as well as assumptions made by, and information currently available to, management.

While the Company believes that its expectations are based upon reasonable assumptions, there can be no assurances that the Company's goals will be realized. Numerous factors (including risks and uncertainties) may affect the Company's actual results and may cause results to differ materially from those expressed in forward-looking statements made by or on behalf of the Company. Some of these factors include the acceptance of the Company's Internet strategy, the acceptance of new SRS Labs' products and technologies, the impact of competitive products and pricing, the timely development and release of media content by the Company, general business and economic conditions, especially in Asia, and other risks detailed in the Company's Form 10-K and Form 10-Q statements filed with the SEC.

All Rights Reserved. SRS, VIP, and the SRS symbol are registered trademarks of SRS Labs, Inc. in the United States and selected foreign countries. TruBass, NuVoice, and WOW Voice are trademarks of SRS Labs, Inc. in the United States and selected foreign countries. All other brand names mentioned are trademarks or registered trademarks of their respective holders.

SOURCE: SRS Labs, Inc.